The Complete Guide To Tax Deductions For Influencers In 2024

Like other self-employed individuals, influencers have various tax deductions available to them.

But did you know many of these costs can be deducted from your taxable income, potentially saving you a significant amount on taxes?

For example, you can deduct some of your home office expenses if you use part of your home exclusively for business. This includes utilities, internet, and rent or mortgage interest proportional to the space used for work.

Let's dive into what qualifies as a tax deduction for influencers and how to maximize your savings.

What Are Tax Deductions For Influencers?

Tax deductions for influencers are business expenses that you can subtract from your total income to reduce your taxable earnings.

As a self-employed individual, these deductions help lower the tax you owe. For influencers, tax deductions include costs directly related to your content creation and business operations. 

To claim a deduction, the expense must be directly related to your influencer business and not a personal cost.

For example, purchasing a camera used exclusively for filming content would be a deductible expense. However, buying a gaming console for personal use wouldn't qualify as a write-off.

Examples Of Influencer Tax Deductions

There are numerous expenses influencers can write off on their taxes. Some common deductions include:

• Equipment costs: Cameras, lighting kits, microphones, tripods, and other gear used to create content are tax-deductible. You can either deduct the full cost in the year of purchase or depreciate the expense over several years, depending on the item's expected lifespan.
• Software and subscription services: Editing programs, design tools, music licensing fees, and subscriptions to platforms like Canva or Adobe Creative Cloud are all deductible if used for your influencer business.
• Home office expenses: If you use a dedicated space in your home exclusively for work, you can deduct a portion of your rent, mortgage interest, utilities, and other home-related costs. The home office deduction is calculated based on the percentage of your home used for business.

Types Of Influencer Tax Write-Offs

Many expenses can be deducted from your taxable income, helping reduce the tax you owe.

These deductions, or tax write-offs, cover various costs for running your influencer business. Here are some key categories:

1. Advertising And Promotion Expenses

Expenses such as sponsored posts, online ads, and contest giveaways can be deducted from your taxes.

This includes any fees paid to social media platforms or advertising networks to boost your posts or run targeted campaigns.

Additionally, if you purchase prizes for a giveaway to increase your following or engagement, the cost of those items is also tax-deductible.

2. Travel Expenses

You can write off many associated expenses if you travel for business purposes, such as attending a conference, meeting with a brand partner, or creating content in a specific location. 

This includes transportation costs like airfare, train tickets, car rentals, and lodging expenses such as hotel rooms or Airbnb rentals.

Meals consumed during business travel are also tax-deductible, although some limitations exist. Generally, you can deduct 50% of your meal expenses while traveling for work.

3. Clothing And Beauty Products

Clothing, accessories, and beauty products purchased specifically for use in your content creation can be written off as business expenses.

For example, if you're a fashion influencer and buy outfits to showcase in your posts or videos, those purchases are tax-deductible. Similarly, if you review or promote beauty products, the cost of those items can be claimed as a business expense.

However, the clothing or products must be used exclusively for your influencer work. If you wear an outfit in a sponsored post but also wear it for personal occasions, you can only deduct a portion of the cost based on its business use.

4. Contractual Services

Running an influencer business often involves hiring other professionals to assist with content creation or administrative tasks. Payments to assistants, photographers, videographers, editors, or stylists for their services are tax-deductible.

If you hire a virtual assistant to help with tasks like email management, social media scheduling, or bookkeeping, their fees can also be written off as a business expense.

5. Product Purchases For Reviews

Many influencers create content centered around product reviews or recommendations. If you purchase items specifically to review or feature in your content, the cost of those products is tax-deductible.

This applies to many products, from tech gadgets to skincare items to home decor. As long as the primary purpose of the purchase is for your influencer work and you're not using the product for personal use, you can claim it as a business expense.

How Do Influencer Tax Deductions Work?

Influencers are generally considered self-employed for tax purposes. This means you're responsible for reporting your income, paying self-employment taxes, and claiming any eligible tax deductions to reduce your taxable income.

Here's how the process works:

1. Income Reporting

As an influencer, the money you earn from collaborations, sponsored posts, or product sales is considered taxable income.

You should receive a 1099-NEC if you earned over $600 from any company. If you get payments through third-party platforms like PayPal or Venmo, you'll also need to report income over $600 (starting from 2024). Keep in mind, even if you don’t receive a 1099, you’re still required to report all income to the IRS​.

2. Self-Employment Tax

As a self-employed individual, you're required to pay a self-employment tax, which includes both Social Security and Medicare taxes (totaling 15.3%).

Breakdown of self-employment tax:

• Social Security Tax: 12.4% on net earnings up to a certain income limit (for 2024, this limit is $160,200).
• Medicare Tax: 2.9% on all net earnings, with an additional 0.9% Medicare surtax applying to high earners (over $200,000 for single filers or $250,000 for married couples filing jointly).

Unlike traditional employees, no one withholds this tax for you, so you're responsible for making estimated quarterly tax payments throughout the year​.

3. Tax Deductions

To lower your taxable income, you can claim various tax deductions. These deductions must be "ordinary and necessary" business expenses, which means they’re common in your field and helpful for your work.

Some common deductions include:

• Home office expenses: If you use a dedicated space in your home exclusively for your work, you can deduct a portion of your rent, mortgage, utilities, and internet.
• Equipment and software: The cost of purchasing equipment like cameras, laptops, microphones, or software tools such as editing programs can be deducted​.
• Travel expenses: If you travel for work, such as attending events or shoots, you can deduct expenses for transportation, lodging, and meals​.
• Marketing and advertising: Expenses incurred for promoting your brand, like social media ads or SEO services, are also deductible​.

It's important to note that if you use certain items, like your phone or home office, for personal and business purposes, you can only deduct the portion of the expense related to your influencer work.

For example, if you use your cell phone for business 60% of the time and 40% for personal use, you would only deduct 60% of your phone bill as a business expense.

4. Tracking And Record-Keeping

To ensure you can claim these deductions, meticulous record-keeping is crucial. Save all receipts, invoices, and other documentation that prove your business expenses. Keeping a clear record helps you maximize your deductions and protect yourself in the event of an IRS audit​.

What Tax Forms Do Influencers Need?

Influencers need to know several essential tax forms for reporting their income and fulfilling tax obligations. Here’s a summary of the key tax forms influencers you should expect to encounter:

1. Form 1099-NEC

If you earned $600 or more from a single client during the tax year, they should send you a Form 1099-NEC (Nonemployee Compensation).

This form reports the total amount paid to you for your services as an independent contractor. You'll receive a separate 1099-NEC from each client who paid you $600 or more.

And even if you don't receive a 1099-NEC from a client, you must still report all income earned on your tax return. So, keep accurate records of your earnings throughout the year to ensure nothing is missed.

For example, let’s say you collaborated with three brands this year. Brand A paid you $2,000, Brand B paid you $1,500, and Brand C paid you $500. You would receive a 1099-NEC from Brands A and B but not from Brand C.

However, you're still required to report that $500 from Brand C even though they didn’t send you a form.

2. Form 1040 And Schedule C

When filing your annual tax return, you'll use Form 1040 (U.S. Individual Income Tax Return) to report all income, including earnings from your influencer business.

As a self-employed individual, you'll also need to complete Schedule C (Form 1040), Profit or Loss from Business.

Schedule C is where you'll report your total business income and expenses for the year. 

This form is divided into several sections, including:

• Part I: Income
• Part II: Expenses
• Part III: Cost of Goods Sold
• Part IV: Information on Your Vehicle
• Part V: Other Expenses

In Part II, you'll list all your business expenses, such as advertising, travel, and home office deductions. Be sure to categorize your expenses accurately and keep supporting documentation like receipts or invoices in case of an audit.

3. Form 1099-K

Form 1099-K is issued if you earn more than $600 through third-party payment processors, such as PayPal, Venmo, or e-commerce platforms like Etsy.

This form reports the total payments you receive from customers or brands through these platforms.

Suppose you make $10,000 through PayPal from various brand partnerships and affiliate marketing. PayPal will issue you a 1099-K form detailing these payments. In previous years, the threshold was $20,000 and 200 transactions, but from 2024 onward, it has been lowered to $600, regardless of the number of transactions​.

You’ll use the information on this form to report your gross income from payment processors on your tax return.

4. Form 1040-ES

Form 1040-ES is used to pay estimated quarterly taxes. Because you're self-employed, taxes aren’t automatically withheld from your income, so you need to pay these taxes yourself throughout the year to avoid penalties.

Let’s say your tax liability is projected to be $8,000 for the year. Instead of paying the entire amount at the end of the year, you’ll break it into four quarterly payments of $2,000 each, using Form 1040-ES​.

Use Form 1040-ES to calculate and submit your quarterly tax payments. Payments are typically due in April, June, September, and January of the following year.

5. Form 8829 (Home Office Deduction)

If you use part of your home exclusively for business purposes, Form 8829 helps calculate your home office deduction. This can include a portion of your rent or mortgage, utilities, and internet costs based on the percentage of your home used for business.

For example, if your home office occupies 10% of your home’s square footage, you can deduct 10% of your rent, utilities, and other related expenses.

If your monthly rent is $2,000 and your utilities total $300, you can deduct $230 ($200 for rent and $30 for utilities) each month​.

So, complete Form 8829 and attach it to your Schedule C when you file your taxes.

Tips For Maximizing Influencer Tax Savings

To maximize your tax savings as an influencer, it's essential to take advantage of all available deductions and structure your business efficiently.

Here are several tips to help you reduce your tax liability:

1. Track All Business Expenses

Keeping accurate records of your income and expenses is the foundation of claiming tax deductions. 

Accounting software or apps can simplify this process by allowing you to easily categorize transactions, store receipts digitally, and generate reports for tax purposes.

Choose a system that works for you, whether a dedicated accounting program like QuickBooks or a more basic option like a spreadsheet. The key is consistently recording all business-related expenses throughout the year so nothing gets missed come tax time.

2. Separate Business And Personal Finances

To make tracking expenses easier and ensure you're only claiming deductions for business purposes, it's wise to keep your personal and influencer finances separate. 

Open a dedicated business bank account and obtain a business credit card exclusively for your influencer-related transactions.

This clear separation will simplify your record-keeping and help you maintain a professional image, and avoid potential issues with the IRS. When all your business income and expenses flow through distinct accounts, it's much easier to identify and claim eligible deductions.

3. Consult With A Tax Professional

Working with a tax professional who understands the unique aspects of your industry can help ensure you're staying compliant and taking advantage of all available deductions.

A knowledgeable tax advisor or CPA can guide you through tracking expenses, categorizing them correctly, and identifying often-overlooked deductions.

They can also help you understand how changes in tax laws may impact your business and advise on strategies to minimize your tax liability legally.

4. Take Advantage Of Home Office Deduction

If you use a dedicated space in your home exclusively for your influencer work, you may be eligible for the home office deduction. This allows you to write off a portion of your home-related expenses, such as rent, mortgage interest, utilities, and insurance, based on the percentage of your home used for business purposes.

To qualify, your home office must be your principal place of business and used regularly and exclusively for work. You can calculate the deduction using either the simplified method, which multiplies the square footage of your office by a set rate, or the regular method, which requires you to determine the actual expenses related to your home office.

Claiming the home office deduction can lead to significant tax savings, so it's worth exploring if you have a dedicated workspace in your home. Just follow the IRS guidelines carefully and maintain proper documentation to support your claim.

5. Leverage Depreciation For Expensive Equipment

Depreciation is the method the IRS allows for deducting the cost of large purchases that will be used over a longer period (typically more than a year).

Instead of deducting the entire cost in the year of purchase, the deduction is spread out over the "useful life" of the item. The IRS determines the useful life of different types of assets. For example:

• Computers: 5 years
• Cameras: 5 years
• Office furniture: 7 years

While depreciation spreads out deductions over multiple years, Section 179 Deduction and Bonus Depreciation provide opportunities to deduct the entire cost of an asset in the year of purchase.

• Section 179 allows you to deduct the full cost of qualifying equipment (up to a certain limit) in the year it is purchased. In 2024, the deduction limit is $1,160,000, which covers most influencer equipment purchases​.
• Bonus depreciation allows you to deduct a large percentage of the asset's cost (currently 80%) in the first year, with the remainder depreciated over the item's useful life. It is typically used for assets that exceed the Section 179 cap.​

Example Of Depreciation

Let’s say you purchased a camera for $10,000:

• Straight-line depreciation: You would deduct $2,000 per year over five years.
• Section 179 deduction: You could deduct the entire $10,000 in the first year, assuming your total qualifying purchases don’t exceed the limit.
• Bonus depreciation: You could deduct 80% of the cost ($8,000) in the first year and depreciate the remaining $2,000 over five years.

How To File Taxes As A Content Creator

As an influencer, you're considered a self-employed individual for tax purposes. This means you'll need to report your income and expenses on Schedule C (Form 1040), Profit or Loss from Business, and pay self-employment taxes in addition to income taxes.

To file your taxes accurately and maximize your deductions, follow these steps:

1. Gather all your income records, including 1099 forms from clients and any other documentation of payments received.
2. Compile your business expenses, categorizing them according to the IRS guidelines. Keep receipts, invoices, and bank statements to support your deductions.
3. Complete Schedule C, reporting your total income and expenses for the year. List your deductions in the appropriate categories and calculate your net profit or loss.
4. Use Schedule SE (Form 1040) to calculate your self-employment taxes covering Social Security and Medicare contributions.
5. Report your net income from Schedule C on your Form 1040 and any other income sources. Attach all required schedules and forms to your tax return.
6. If you expect to owe $1,000 or more in taxes, make quarterly estimated tax payments throughout the year to avoid penalties.

Filing taxes as a content creator may seem daunting, but this detailed guide breaks down the process step-by-step.

Remember to keep accurate records, claim all eligible deductions, and seek the advice of a tax professional if needed to ensure you're meeting your tax obligations while maximizing your savings.

Do Influencers Pay Taxes On Gifts?

Yes, influencers must pay taxes on gifts they receive from brands, particularly when those gifts are provided in exchange for promotional services.  

The IRS typically considers these items taxable income if they are given in exchange for services, such as a review or promotion. 

Here’s how it works:

1. Gifts vs. Payment In Kind

When a brand gives you products or services in exchange for a shoutout, review, or any form of promotion, the IRS treats these items as payment in kind rather than gifts.

This means the item's value is considered taxable income and should be reported on your tax return. The fair market value of the item—what it would cost if purchased at retail—is what you report as income​.

2. 1099-MISC And 1099-NEC

If the value of the gifts you receive exceeds $600, the brand may issue you a Form 1099-MISC or 1099-NEC.

Even if you don’t receive a 1099 form, you're still responsible for reporting the fair market value of the items as income​.

For Example:

Imagine a brand sends you a luxury handbag worth $1,000 in exchange for a social media post.

Even though you didn’t receive cash, the IRS considers the value of that handbag as taxable income. You would need to report the $1,000 on your tax return and pay taxes on it.

Exceptions

If the gift is given without any expectation of promotion or service, it may qualify as a true gift and wouldn’t be considered taxable.

However, this is rare in influencer marketing, where most products are given in exchange for content.

What Are The Best Strategies For Influencers To Reduce Taxes?

As self-employed individuals, influencers can use several strategies to reduce their taxes effectively. Here are some of the best approaches:

1. Set Up A Retirement Plan

Contributions to a self-employed retirement plan, such as a SEP IRA or Solo 401(k), are tax-deductible. 

These plans offer higher contribution limits than traditional IRAs, allowing you to reduce your taxable income while saving for retirement​.

• SEP IRA (Simplified Employee Pension Plan): This plan allows you to contribute up to 25% of your net earnings from self-employment or up to $66,000 (for 2024), whichever is lower. Contributions to a SEP IRA are tax-deductible, and the earnings in the account grow tax-deferred until you withdraw them in retirement. This offers much higher contribution limits than traditional IRAs, making it a powerful tax-saving tool​.
• Solo 401(k): This plan is designed for self-employed individuals with no employees. It allows you to contribute as both an employer and an employee. The employee contribution limit is $22,500 (or $30,000 if you're over 50), and the total contribution limit is up to $66,000. Like the SEP IRA, contributions are tax-deductible, reducing your taxable income, and the funds grow tax-deferred.

2. Form An LLC And Elect S-Corp Status

For influencers with significant earnings (typically over $60,000), forming an LLC and electing S-Corp status can reduce self-employment taxes. 

When you elect S-Corp status, you can split your income into two categories: 

• Salary
• Distributions

You pay yourself a reasonable salary, which is subject to income and self-employment taxes (Social Security and Medicare). However, the remaining profits, known as distributions, are only subject to income tax, not self-employment taxes. This can save you thousands in self-employment taxes, which would otherwise be 15.3% of your income.

For example, if you make $100,000 in a year and pay yourself a $60,000 salary, you'll pay self-employment taxes on the $60,000 but not on the remaining $40,000 (which is taxed as distributions). This strategy is highly beneficial for influencers earning significant income.

Additionally, establishing an LLC gives you legal protection, separating your personal assets from your business assets. While forming an LLC alone doesn't change how you're taxed (you're still taxed as a sole proprietor by default), it simplifies management and protects your personal liability​.

3. Deduct Health Insurance Premiums

If you're self-employed and not covered by another plan (like a spouse's employer plan), you can deduct the cost of health insurance premiums, including medical, dental, and long-term care insurance.

Self-employed individuals can claim this deduction on their tax return, reducing their adjusted gross income (AGI). This deduction is available even if you don't itemize your deductions, making it a valuable tax-saving opportunity.

The premiums for health insurance for yourself, your spouse, and dependents are deductible. You can also deduct the cost of long-term care insurance up to a certain limit based on your age.​

4. Track Mileage For Business Use Of Your Car

If you use your car for business-related purposes—such as attending events, meeting clients, or traveling to photoshoots—you can deduct your mileage or actual vehicle expenses. 

There are two ways to claim this deduction:

• Standard Mileage Rate: The IRS allows you to deduct a flat rate per mile driven for business purposes. In 2024, the rate is 65.5 cents per mile. This method is easier to use and requires less record-keeping​.
• Actual Expenses: Alternatively, you can deduct a percentage of the actual costs of owning and operating your vehicle (including gas, insurance, repairs, depreciation, and more). The percentage is based on the proportion of miles driven for business compared to total miles driven during the year​.

For example, if you drive 10,000 miles in a year, and 4,000 of those miles are for business purposes, you can deduct either 4,000 miles at the standard rate (about $2,620) or 40% of your actual expenses for the vehicle.

Final Thoughts

Managing taxes as an influencer can seem complex, but with the right strategies, you can significantly reduce your tax liability and ensure you comply with IRS regulations.

Understand and leverage deductions like home office expenses and equipment, and set up a retirement plan such as a SEP IRA or Solo 401(k) to maximize your savings while planning for the future.

For those with significant earnings, forming an LLC and electing S-Corp status offers additional tax relief by reducing self-employment taxes through salary and distribution strategies.

It's essential to stay organized and track all expenses meticulously, especially when claiming deductions like mileage and health insurance premiums. Maintaining clear records will ensure you take advantage of every tax-saving opportunity and protect you during an audit.

Finally, working with a knowledgeable CPA can be invaluable as your influencer business grows. They can guide you through the intricacies of tax laws, ensuring you're maximizing your deductions and making informed decisions.

Kajabi empowers influencers to manage their business seamlessly, offering tools to track income and expenses efficiently. By streamlining your workflow, Kajabi helps you focus on maximizing deductions and minimizing tax liabilities. Turn your knowledge into revenue with Kajabi's all-in-one platform.

Frequently Asked Questions

Can Influencers Write Off?

Yes, influencers can write off various business-related expenses, just like other self-employed individuals or freelancers. These write-offs include costs considered “ordinary and necessary” for running their business, such as equipment, professional services, marketing expenses, and travel. These deductions help reduce their taxable income and lower their overall tax liability.

What Expenses Can I Claim As A YouTuber?

As a YouTuber, you can claim various business-related expenses such as equipment (cameras, computers), software subscriptions (editing tools), home office costs, internet and phone bills, travel expenses (if work-related), and even marketing and promotion costs (ads, website hosting). Make sure these are ordinary and necessary expenses for running your YouTube channel and that you keep receipts for proof​.

What Is The Tax Write-Off For OnlyFans?

OnlyFans creators can deduct expenses directly related to content creation and their business. This includes equipment (cameras, lighting), clothing and beauty products used for content, professional services (e.g., photographers), marketing expenses, and even a portion of rent or utilities if they work from home​. Since the IRS considers income from OnlyFans as self-employment income, the same tax rules apply, allowing creators to deduct necessary expenses to reduce their taxable income.

What Is The Tax Code For Social Media Influencers?

Influencers are generally classified under the tax code as self-employed individuals, which means they report their income using Schedule C (Form 1040). They also need to pay self-employment taxes using Form 1040-ES for quarterly tax payments​.

What Is Tax Deductible For A Content Creator?

Content creators, including influencers, YouTubers, and bloggers, can deduct various expenses necessary for their business. Common tax deductions include costs for equipment such as cameras, computers, lighting, and software. Marketing, advertising, website hosting fees, travel related to content creation, and internet costs are also deductible. Even more specific expenses like props, costumes, and event tickets, if used for content, can be written off.

Are Influencers Considered Paid Media?

Influencers are generally not classified as paid media in the traditional sense. Paid media refers to advertising placements that brands purchase, such as banner ads or TV commercials. Instead, influencers are considered independent contractors or freelancers who brands compensate for creating sponsored content. They promote products or services through their platforms, often in exchange for a fee or commission, but they remain independent and separate from the brands’ media-buying process.